The new General Law for the Strengthening and Harmonization of Cadastre and Property Registries, approved this week in the Senate and sent to the federal Executive, was necessary in the country given the historical backlog that exists in the registration of real estate, but it will lead to the updating of cadastral values, so there could be an increase in the cost of property tax for all property owners in the country.
This was highlighted by experts in real estate and housing matters, who expressed that it is evident that this reform, in addition to seeking the digitalization of the country's cadastral information, was approved given the federal government's need for greater resources, so they pointed out that it is necessary that what is collected actually be allocated to urban improvement in the country's municipalities.
Likewise, they warned that granting new powers to the Digital Transformation Agency, now in cadastral and property matters, may at first be positive for modernizing the sector, but the risk is that these data banks could be used for political purposes or fall into the hands of organized crime, which could have access to information about what properties you own, their value and location.
Leonardo González, a specialist in real estate and housing matters, told EL UNIVERSAL that the cadastre has a historical backlog, since the vast majority of real estate properties appear at 40% of their real value, so it is evident that there will be an increase in revenue collection.
"It was urgent and necessary to have a reform because there is a gap between the cadastral value and the commercial value of properties and homes. Only 40% of the real value of these properties is reflected in the property tax bill," he explained.
He considered that the property tax is outdated and municipalities are the ones that collect the least in the country, since there are no tools and no uniform legal framework, so it only contributes 0.2% of GDP when in OECD countries it reaches 1.9%.
He celebrated the broad reform to modernize the cadastral system in Mexico, which creates the Unique Cadastral Key (CUC) and assigns a unique identifier to each property in the country to facilitate its location, registration and consultation on a national platform.
However, he explained that by updating the cadastral value of real estate in the country, it is clear that even if no increase in the property tax is included, the collection of this tax will increase, which will evidently have a political cost for the government.
"It is also clear that this reform was pushed at this moment given the Mexican government's need to obtain resources in the face of the increase in debt and the commitments it has due to the distribution of social programs."
He considered that despite not being a very popular measure, since it indirectly increases the collection of the property tax, this modernization was necessary, in which the Digital Transformation and Telecommunications Agency will participate, which will have new powers, such as being assigned powers to develop, administer and operate the National Cadastral Platform, as well as issuing models, guidelines and technological tools.
For his part, the real estate expert Fernando Soto agreed that this cadastral reform was necessary in Mexico due to the low revenue collection from the property tax.
"It is evident that although the new law does not mention an increase in the property tax, once it comes into force and the cadastral value of thousands of properties is updated, the property tax bill could even double. That is, a family that has a home whose cadastral value is one million pesos, when updated to the real value, could be paying 100% more."
He commented that one of the most sensitive issues in this reform is the role that the Digital Transformation and Telecommunications Agency will play, which will have access to all the information on Mexicans' real estate, with first name, last name, location and value.
"At first it seems like a good strategy to avoid money laundering in the purchase of properties and to locate properties that are not legally registered, that were the product of dispossession, but we know that the Mexican government has not been characterized by good safeguarding of personal and sensitive data."
The expert warned that these censuses, this cadastral X-ray of the country, with all that precise data on homes and their owners, can be used in a malicious manner for political and electoral purposes and, in the worst case, fall into the hands of organized crime, which would have access to the location and amount of your real estate assets, which would be very dangerous.
"What is clear is that the reform was necessary and also that the federal government carried it out at this moment due to the lack of resources given the distribution of social programs in a generalized and populist manner, but also due to the increase in the financial debt that the Mexican government has," he added.
He indicated that it is clear that the property tax will increase for the vast majority of Mexicans, but the desirable thing would be for those resources to be used in the municipalities themselves, for street lighting, water, drainage, security, and that it not be a pretext to continue squandering resources on social programs and other megaprojects.
Fernando Soto recalled that the Unique Cadastral and Registry Certificate (CUCR) will directly link the physical and geographic data of the cadastre with the legal information of the Public Registry of Property. In addition, the National Cadastral Platform will create a shared digital system to coordinate information among the federal government, the federal entities and the municipalities.
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